5.1 Chapter Five Learning Outcomes
Learning Objectives
- Identify how the Crossover Point affects decision-making.
- Explore the interaction of Leverage and Risk Measures.
- Consider the variables that go into a firm’s Optimal Capital Structure.
- Connect the firm’s Capital Structure with its Valuation.
- Calculate the effects of Leverage on Net Income, Return on Equity, and Earnings per Share.
- Observe the effect of increased leverage on corporate risk.
- Identify the Optimal Degree of Leverage for a company’s marginal project investments.